Ugly But Honest News 2-16-2017

Real estate housing and economic news round up for February 16 2017

Talking about the latest foreclosure numbers, home builders and RESPA, how banks secure foreclosures makes a difference and more!


Good News About Foreclosures


CoreLogic released their December 2016 National Foreclosure Report which shows the foreclosure inventory declined by 30% and completed foreclosures declined by 40% compared with December 2015. The number of completed foreclosures nationwide decreased year over year from 36,000 in December 2015 to 21,000 in December 2016, representing a decrease of 82% from the peak back in September 2010.


Remember this is a national report and that fewer foreclosures could mean that the low inventory of affordable homes in some areas will get worse.



A Letter to CFPB. New Home Builders Violate RESPA with Lenders!


For Decades, some New Home Builders have required consumers to use “in-house” lenders.  Based on the CFPB’s decision regarding the Prospect mortgage case, New Home Builders are non-compliant.  For decades, New Home Builders have required consumers to get pre-qualified with “in-house” lenders.  Based on the prospect ruling, New Home Builders are again, non-compliant.  Lenders, Realtors, and Consumers, have been putting up with this behavior for decades.  We believe it’s time for the CFPB to put an end to this illegal behavior.


I agree and hate some of the BS tactics that some home builders use. Notice I said some and not all…



Made for Each Other


Don’t be fooled by the idiotic exertions of the Red team and the Blue team. They’re just playing a game of “Capture the Flag” on the deck of the Titanic. The ship is the techno-industrial economy. It’s going down because it has taken on too much water (debt), and the bilge pump (the oil industry) is losing its mojo.


Neither faction understands what is happening, though they each have an elaborate delusional narrative to spin in the absence of any credible plan for adapting the life of our nation to the precipitating realities. The Blues and Reds are mirrors of each other’s illusions, and rage follows when illusions die, so watch out. Both factions are ready to blow up the country before they come to terms with what is coming down.


Today’s must read Ugly But Honest Truth!



Clearboarding Versus Plywood to Secure Vacant and Abandoned Properties


A single, foreclosed, vacant or abandoned home can result in economic loss, which includes not only the loss in the value of that home, but also losses borne by the neighbors surrounding the property and broader community.


Much of that loss is due to the conditions upon which a vacant property is maintained. Specifically, the manner in which the property’s doors and windows are secured has a major impact as a home that easily conveys the property’s status as abandoned and allows vandals, arsonists, and criminals entry, thus driving up costs.


The traditional manner of securing doors and windows for abandoned homes is plywood. The alternative to plywood is clearboarding. Moving from plywood to clearboarding is a cost-effective solution to fight the blight associated with vacant and abandoned properties.


Interesting stuff but the banks are going to secure foreclosures in the cheapest manner possible. The banks can write off the loss from the foreclosure and do not care about the negative impact on the surrounding homes or community.


The only way this will change is if a law is passed and that would require politicians that are not minions of the big banks…



CFPB: Mortgage Payment Issues a Top Complaint


The CFPB has handled approximately 260,500 mortgage complaints since July 21, 2011 making mortgages the second most-complained-about product, representing 24 percent of total complaints.


The most common issues identified by consumers are problems when they are unable to pay (loan modification, collection, foreclosure) (49 percent) and making payments (loan servicing, payments, escrow accounts) (33 percent).


Consumers identified “making payments” (loan servicing, payments, escrow accounts) in approximately 54% of mortgage servicing complaints received in December 2016.


Imagecomplaints about mortgages




If the CFPB is eliminated, what will consumers be able to do when banks don’t act right? Hope the banks apply lubrication before screwing them?


Not a fan of the CFPB but if the banks are not watched, they will do everything and anything they can to increase profits.



Zillow Loses $8.3M Federal Copyright Lawsuit


Zillow was ordered to pay $8.3 million in damages after losing a copyright infringement lawsuit brought by VHT Inc. in United States District Court in Seattle.


VHT, which provides photography and image management services, originally filed its complaint in July 2015, alleging that images displayed or saved to the Zillow Digs website violated VHT’s copyright.


While I am not a fan of Zillow, this may have been a simple but very expensive mistake.


Or it could be Zillow being jerks.


Believe what you want…



Quicken and DOJ Square Off in Mortgage Case


Attorneys for the Justice Department and Quicken Loans Inc. will face off in a Detroit courtroom Monday in what could be a lengthy legal battle over whether the loan giant ignored “red flags” in dicey home loans that didn’t meet federal standards.


Quicken describes the federal lawsuit over its mortgage lending practices as “nonsensical” and “ludicrous.”


The Justice Department sued Quicken in April 2015, alleging the company knowingly submitted claims for hundreds of improperly underwritten Federal Housing Administration-insured loans.


The loans involved inflated appraisals, poor credit risks and borrowers with insufficient incomes, the suit claimed. The government alleges Quicken had a culture of bending the rules and gave “speed bonuses” to underwriters. The mortgage company failed to disclose the problems with the loans that cost the federal government millions of dollars when they went bad, federal lawyers contend.


Interesting case without a doubt. And while I am not a fan of Quicken due to how they treated a buyer client long ago, they earn my respect for having the testicular fortitude to stand up to the DOJ.


However, if they are found guilty, I hope they pay dearly and executives go to jail. And when I say jail, I don’t mean some country club minimum security type facility.



Who Will Pay for the Wall?


Building a wall on the Mexican border –and having Mexico pay for it– has been a centerpiece of President Trump’s policies to control immigration.


One source of controversy is the funding of this project. The Trump Administration has stated that a Destination Based Cash Flow Tax (commonly referred to as a “Border Adjustment Tax”) applied to US-Mexico trade is one possible way to fund the wall.


Implementation of the Destination Based Cash Flow Tax would likely result in an increase in prices of all imported consumer goods. Consumer choice would also decline. It is unclear whether the resulting tax system would yield sufficient tax revenue based on Mexican based trade to completely fund the construction of the wall. To the extent that the Destination Based Cash Flow Tax is determined to be inconsistent with World Trade Organization principles, it is likely to spur retaliation on the part of our trade partners.


Their opinion, NOT mine. But I do think that no matter what, American taxpayers will wind up paying for this, one way or another.


However, something needs to be done about illegal immigrants and securing our borders…



Gallup’s US Economic Confidence Index Down BUT Still Positive


Americans are slightly less confident in the U.S. economy than they were in late January, but they remain positive overall. Americans are now less optimistic about the economy’s future.


Around President Donald Trump’s inauguration last month, the index reached highs not seen before in Gallup’s nine years of tracking economic confidence. Although the index has dropped several points in the first half of February, it remains higher than most of the readings Gallup has recorded since 2008.


You have to wonder if all the BS in the news and the constant exposure to clickbait negativity on social media is hurting consumer confidence?



Want to Make a Lie Seem True? Say It Again. And Again. And Again


You only use 10 percent of your brain. Eating carrots improves your eyesight. Vitamin C cures the common cold. Crime in the United States is at an all-time high.


None of those things are true.


But the facts don’t actually matter: People repeat them so often that you believe them. Welcome to the “illusory truth effect,” a glitch in the human psyche that equates repetition with truth. Marketers and politicians are masters of manipulating this particular cognitive bias—which perhaps you have become more familiar with lately.


Repetition is what makes fake news work, too, as researchers at Central Washington University pointed out in a study way back in 2012 before the term was everywhere. It’s also a staple of political propaganda. It’s why flacks feed politicians and CEOs sound bites that they can say over and over again. Not to go all Godwin’s Law on you, but even Adolf Hitler knew about the technique. “Slogans should be persistently repeated until the very last individual has come to grasp the idea,” he wrote in Mein Kampf.


Something to consider when watching the news or scrolling through your Fecebook or Twitter stream…



Housing and The “Flyover” Mentality


Right around the New Year, an article by Wired’s Emily Dreyfuss popped up on one of my newsfeeds entitled, “The Middle Class Can’t Afford to Live In Cities Anymore.” My reaction was skepticism, and that skepticism was confirmed when I read the article, which was yet another piece about the same hot coastal places that everybody keeps writing about – Boston, New York, San Francisco, and so forth. That, in turn, started me thinking about the way what has been derisively called “flyover country,” (everything between the coasts) seems to have become largely invisible to much of the American media, and how so much of the information we get about so many of the issues that concern us is reflected through a distorted coastal lens.


First, let’s get some basic information out of the way. The middle class, by any reasonable definition, can clearly afford to live in most of America’s cities today. Not all, but most. Let’s define “middle class” as families earning 100 to 150 percent of the national median family income, which was $68,260 in 2015. Assuming that a family spends 33 percent of their income for mortgage, taxes, and insurance, they can usually afford a house costing roughly four times their gross income.


While the Anderson SC area is not what might be considered “flyover country” geographically, it IS affordable.


According to Census Bureau information for 2015, the median income in Anderson County was $42,143.


4 times $42,143 is $168,572.


There are currently 187 homes with at least 3 bedrooms for sale in Anderson County between $100,000 and $168,572. If you go lower or higher, you will find there are plenty of options in Anderson County.



Reuters Economists Poll: Low Chance of 4% U.S. Growth This Year


The U.S. economy will get a small boost in 2017 from President Donald Trump’s planned deregulation and fiscal stimulus, a Reuters poll showed, but economists said the probability of achieving 4 percent growth was low.


The latest results showed a wide gap between economists, who were criticized for being too optimistic late in the last economic cycle, and market expectations that have sent bond yields and the U.S. dollar soaring and pushed Wall Street to record highs.


I am pretty optimistic about 2017 for both the economy and the housing market. My suggestion is that we hope for the best but plan for the worst.


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